DTN Early Word Grains

Another Green Morning

Darin Newsom
By  Darin Newsom , DTN Senior Analyst
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6:00 a.m. CME Globex:

December corn was 2 cents higher, November soybeans were 4 cents higher, and December Chicago (SRW) wheat was 2 cents higher.

CME Globex Recap:

The grain and oilseed complex continues to go green following USDA's latest round of crop production and supply and demand guesses, meaning overnight trade was higher once again. Soybeans continue to lead the way as announcements of new export sales are seen almost daily. Other commodity sectors were mixed with softs mostly lower (though Dec cotton finally found some buying interest), energies mostly higher, and metals lower. Financial markets were quiet overnight into Thursday morning.

OUTSIDE MARKETS:

The Dow Jones Industrial Average closed 39.32 points (0.2%) higher at 22,158.18, the NASDAQ Composite gained 5.91 points (0.1%) to 6,460.19, and the S&P 500 rallied 1.89 points (0.1%) to 2,498.37 Wednesday. DJIA futures were 3 points lower early Thursday morning. Asian markets closed mostly lower with Japan's Nikkei down 58.38 points (0.3%), Hong Kong's Hang Seng losing 116.88 points (0.4%), and China's Shanghai Composite off 12.72 points (0.4%). European markets were trading mostly lower with London's FTSE 100 gaining 9.97 points (0.1%), Germany's DAX down 22.89 points (0.2%), and France's CAC 40 adding 0.12 point. The euro gained 0.0013 to 1.1898 while the U.S. dollar index dipped 0.06 to 92.35. December 30-year T-Bonds were 1/32 higher at 154'27 while December gold slipped $0.20 to $1,337.80. Crude oil was $0.33 higher at $49.63 while Brent crude gained $0.28 to $55.44. China's Dalian soybean futures were higher and Malaysian palm oil futures were lower overnight.

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BULL BEAR
1) December corn remains in an uptrend on its daily and weekly charts. 1) The corn markets' major (long-term) trends remains sideways-to-down.
2) November soybeans' Wave 5 (of a 5-wave minor uptrend) could result in a test of $10.00. 2) Nov soybeans Wave 5 could be limited by continued commercial selling, indicated by a stronger carry in the November-to-January futures spread.
3) December Chicago wheat is slowly gaining bullish momentum. 3) Wheat's long-term forward curve continues to reflect a bearish supply and demand situation.

The weekly Newsom on the Market column can be found on subscription sites only. On DTN Pro it is in News/Town Hall and on MyDTN in News/Columns.

MORE COMMODITY-SPECIFIC COMMENTS

CORN The corn market was showing gains early Thursday morning, though overnight trade was quiet. Dec corn registered trade volume (futures only) of 6,900 contracts it moved within a 1 1/2-cent trading range for the session. Fundamentally there is no fresh news, with traders waiting on actual harvest yield data to start coming in from combines. Technically Dec corn continues to show a minor (short-term) uptrend on its daily chart and a secondary (intermediate-term) uptrend on its weekly chart. Short-term resistance is pegged at $3.61 1/2, $3.72 1/4, and $3.80 3/4, while secondary resistance is projected at $3.62 3/4, $3.74 1/4, and $3.83 1/2. Delivery of 87 contracts was reported against the September issue, putting the total at 3,341 contracts.

SOYBEANS November soybeans remain in a 5-wave minor (short-term) uptrend on its daily chart, with an outside chance of extending this wave to near $10.00. Wave 3 peaked at $9.77 1/2, between resistance levels of $9.69 1/4 and $9.84 with Wave 4 falling to a low of $9.37 1/2 before closing at $9.50 1/2 Tuesday. Initial resistance for Wave 5 could be seen at that same $9.84 mark, then $9.98 3/4. One limiting factor could be the increased commercial selling seen over recent weeks with the carry in the November-to-January futures spread strengthening to 10 cents. This covers a bearish 71% of calculated full commercial carry. As with corn, traders are waiting for actual harvest yield data to start rolling in. There were no new deliveries reported against the September issue, leaving the total at 249 contracts.

WHEAT Winter wheat contracts were showing modest gains early Thursday morning as December Chicago continues to try to extend its minor (short-term) uptrend. Wednesday saw the contract poke its head above the previous short-term high of $4.48 before falling back at the close. Thursday morning has Dec Chicago making another quiet attempt at breaking through this mark so it can extend the minor uptrend to the initial price target of $4.62 1/2 on its daily chart. Fundamentally winter wheat has seen some commercial buying of late, though the carry in December-to-March futures spreads (both Chicago and Kansas City) continue to reflect a bearish view of supply and demand. Delivery of 4 contracts was reported against the September Chicago issue, putting its total at 334 contracts. Delivery of 19 contracts were reported against the September Kansas City issue, putting its total at 1,211 contracts.

DTN Cash Change From National Contract Change from
Commodity Index Prev Day Avg. Basis Month Prev Day
Corn: $3.07 $0.00 -$0.45 Dec $0.000
Soybeans: $8.94 $0.09 -$0.66 Nov -$0.006
SRW Wheat: $3.99 $0.02 -$0.44 Dec $0.012
HRW Wheat: $3.63 $0.03 -$0.81 Dec $0.004
HRS Wheat: $5.92 $0.01 -$0.52 Dec -$0.011

Darin Newsom can be reached at darin.newsom@dtn.com

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